Own capital is the code in the balance sheet. Balance sheet

Equity on the balance sheet is the total amount of a company's resources obtained solely from funding sources owned by its owners. Equity capital can be calculated by applying several different methods, we will analyze them further.

The essence of the term "own capital"

When characterizing equity as an object of economic analysis, two options for its definition are most often given:

• the value of the assets of the enterprise, not burdened by the presence of external liabilities;
• a list of sources of financing for the organization's activities that make up the amount of its capital.

The first interpretation is often given in legal acts issued by government agencies:

• in Art. 35 of the Federal Law “On Joint Stock Companies” dated 12/26/1995 No. 208-FZ for institutions of the credit and financial sector, it is proposed to calculate the value of equity capital, and not net assets;
• in paragraph 29 of the order of the Ministry of Agriculture of the Russian Federation dated 01.20.2005 No. 6, attention is drawn to the fact that the amount of equity capital is the difference between the assessment of all assets and liabilities of the company, or, in other words, is identical to the term of net asset value.

It can be seen that the recognition of the equivalence of the terms of equity capital and net assets is justified, and both of these categories are defined as the difference between the assets and liabilities of an economic entity.

Next version of the description equity on the balance sheet is union of elements:

• statutory, additional, reserve fund;
• the volume of shares purchased from shareholders;
• retained earnings of the company;
• amounts of revaluation of fixed assets and intangible assets.

All elements are reflected in pp. 1310–1370 of the balance sheet. Such a representation is quite consistent with the global theory of determining the size of equity capital.

The choice of method for calculating equity capital depends on the tasks facing the specialist making the calculation. In this case, it is often necessary to take into account the wishes of investors, credit institutions or company owners. Management's own views have a significant influence on the choice of algorithm.

A line in the balance sheet reflecting the amount of equity

Having chosen the standard method as the preferred approach to solving the issue of calculating the amount of equity capital, it is enough to use the data from page 1300. That is, just take the result of the 3rd section:

SK = line 1300 f. No. 1.

If the company is interested in applying the calculation of net assets, then equity on the balance sheet is not just a single value from page 1300, but a complete calculation with several variables in its composition. Let's see how this calculation is done in the next section.

Calculation of equity capital according to the balance sheet - formula by order of the Ministry of Finance

Taking as a basis the assumption that net assets are identical to equity capital, a different calculation algorithm can be applied. It was reflected in the order of the Ministry of Finance of the Russian Federation of August 28, 2014 No. 84n and some other regulations:

SK = Act. calc. - Obligation. calc. ,

Act. calc. - assets accepted for calculation - all assets of the company minus the debt of the founders on contributions to the authorized capital;

Mandatory calc. - liabilities accepted for calculation - all liabilities minus deferred income (the amount of state aid and property received free of charge).

Balance sheet equity formula, according to the order of the Ministry of Finance, uses balance lines 1400, 1500, 1600.

In addition, information is collected separately on the debts of the company's participants on contributions to the authorized capital, accumulated by the entry Dt 75 Kt 80.

They also allocate the corresponding deferred income on the loan account. 98.

The sequence of steps taken to implement the method of the finance department is as follows:

1. Get the amount of pp. 1400 and 1500 - the total amount of obligations;
2. Reduce the result by credit balances on the account. 98 related to state aid and gratuitous receipts;
3. Reduce the figure in line 1600 by the amount of the debit balance on account 75;
4. Subtract from the value obtained in paragraph 3 the value obtained in paragraph 2.

Based on the above, equity by balance sheet lines represent in the form

SK \u003d (p. 1600 - ZU) - ((p. 1400 + p. 1500) - DBP),

ZU - the debt of the founders;

DBP - deferred income.

The best value of the equity ratio

The result obtained as a result of calculations according to the instructions of the Ministry of Finance must be at least greater than zero. If the displayed value is less, the company has problems associated with excessive lending or lack of marketable assets.

In order to conduct analytical studies, a simple average of equity values ​​at the beginning and end of the year is most often used. It can be represented as a formula:

SC Wed. = (CK1 + CK2) / 2.

IMPORTANT! If the option with the calculation of net assets is chosen as an approach to determining the amount of equity capital, then the result obtained cannot be less than the amount of the authorized capital. Otherwise, the joint-stock company or LLC will be obliged to increase the received value to the size of the authorized capital, or the tax authorities will have the right to start the procedure for liquidating the company.

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Equity serves as a basic indicator of a company's financial strength, and a company can choose from several methods to determine it.

The balance sheet of an organization presents many important financial indicators that characterize the company's business, including the cost of equity. At the moment, there are various ways to calculate such an indicator as equity capital - we will consider this below.

One of the main methods for calculating equity capital is based on the data of the balance sheet and is indicated in line 1300 “Total for Section 3”. It consists of the authorized, additional capital (also arising from the revaluation of fixed assets), the reserve fund, as well as retained earnings.

In Russian legislation, the concept of equity is often understood as net assets, which are formed from the balance sheet data by subtracting from the company's assets (line 1600) all liabilities (lines 1400 and 1500), participants' debt and adding deferred income. This method helps participants and investors evaluate the value of the business.

There is also a method of determining equity for tax purposes when it comes to calculating income tax and there is controlled debt, that is, debt on a loan or credit, when the person who issued the loan or collateral is a foreign firm owning more than 20% of the authorized capital of the borrower (directly or indirectly).

We must not forget that the debt must exceed more than three times the amount of equity. For such borrowings, interest is not taken into account in expenses in full, but within certain limits (the “thin capitalization” rule). When we calculate equity for this case, equity in the balance sheet is line 1300 “Total for Sec. Ш” plus the debt of the borrower for taxes.

I note that when it comes to tax arrears, this does not include arrears in contributions to funds (Pension Fund, Social Insurance Fund, Compulsory Medical Insurance Fund).

Equity. Balance Formula

Equity capital consists of balance sheet liability items - authorized capital, share capital and contributions of comrades (line 1310), additional capital (line 1350), reserve fund (line 1360), retained earnings (line 1730) and so on.

The equity formula for the balance sheet is quite simple. Equity in the balance sheet is line 1300 “Total” under section III “Capital and reserves”. For example, let's find our own funds in the balance sheet of Soyuz LLC. Data as of December 31:

Authorized capital - 10 thousand rubles;

Revaluation of non-current assets - 50 thousand rubles;

Retained earnings - 1000 thousand rubles.

Equity capital is 1,060 thousand rubles. (10 thousand rubles + 50 thousand rubles + 1000 thousand rubles).

The value of the authorized (share) capital is reflected in the balance sheet in accordance with the registered charter of the company, it represents the contributions of the founders (participants, shareholders) of the company. For an LLC, the minimum amount of a UK is 10,000 rubles, for public JSCs 100,000 rubles, and for non-public JSCs the same 10,000 rubles. It can be made both in cash and non-monetary (securities, property rights, etc.), while there must be an independent assessment of such a contribution. State-owned companies have an authorized fund instead of an authorized capital. You can find the size of the UK in line 1310 of the balance sheet.

When a company underestimates non-current assets, when selling shares, shares, receives an amount in excess of the nominal value, receives gratuitous assistance as a contribution to the property of the company, this is taken into account as additional capital.

A reserve fund is created from the company's profit to compensate for possible losses, including in the case of outstanding receivables. The amount of the provision is determined separately for each doubtful debt. Joint-stock companies are obliged to create it, for an LLC such an obligation is provided for in the charter. In the balance sheet, the reserve capital is reflected in line 1360 "Reserve capital".

When the profit remains at the disposal of the company, did not go to taxes and was not distributed among the participants (shareholders), it is reflected on account 84 "Retained profit (uncovered loss)". Retained earnings have the right to be spent only by the decision of the owners, they can send it to dividends or to increase the authorized capital. You can also use profits to cover last year's losses.

Under the equity capital of the organization refers to the total amount of funds available to the company. Or rather, the funds belonging to the members of the organization. And how is the value of the organization's equity capital determined according to the balance sheet?

How to determine the amount of equity capital?

According to the balance sheet data, the balance of line 1300 “Total for section III” corresponds to the value of the organization’s own capital, i.e. the total amount for section III “Capital and reserves” of the balance sheet (Order of the Ministry of Finance dated 02.07.2010 No. 66n, paragraph 66 of the Order of the Ministry of Finance dated July 29, 1998 No. 34n).

Recall that the balance of capital and reserves in the balance sheet is determined as follows:

line 1310 "Authorized capital (share capital, authorized fund, contributions of comrades)"

line 1320 "Treasury shares repurchased from shareholders"

line 1340 "Revaluation of non-current assets"

line 1350 "Additional capital (without revaluation)"

line 1360 "Reserve capital"

line 1370 "Retained earnings (uncovered loss)"

It is at the expense of the organization's own capital that dividends are paid to participants. And upon termination of the organization's activities, the size of its own capital will show the amount of funds that is subject to distribution among the participants. However, it must be understood that equity can be negative. This is possible when the organization operates at a loss and its accumulated value exceeds the sum of other elements of equity capital (authorized, additional, reserve capital).

We talked in more detail about accounting for the organization's own capital in a separate one.

Please note that if the calculation of equity is made to determine the maximum amount of interest taken into account in the cost of controlled debt, then the amount of equity will be equal to the sum of the balance of line 1300 and debt on taxes and fees (

In Russian regulatory documents, the concept " capital" (own capital) is not defined. The concept of "capital" is defined only in clause 7.4 of the Accounting Concept in the Market Economy of Russia as " the balance of the organization's economic assets after deducting accounts payable from them...".

In accordance with International Financial Reporting Standards (hereinafter referred to as IFRS), capital represents the owners' investments in the enterprise and the profit retained among the owners accumulated over the entire period of the enterprise's operation.

The capital structure in general terms, in accordance with the Accounting Regulation "" (PBU 4/99), is presented as follows: authorized capital, additional capital, reserve capital, retained earnings.

The most relevant information for the investor is the following information regarding the capital of the enterprise:

total external sources of capital formation - the total amount of funds invested in the company by investors;

total internal sources - the accumulated financial result left at the disposal of the company.

It does not provide information about the composition of external or internal sources. In the balance sheet, these indicators are mixed with each other in various articles. Let's consider the issue in more detail.

In Russian accounting standards, the accounts that include data on the total amount of funds invested in the company by investors are "Authorized capital" and "Additional capital".

The authorized capital in the legislation is given a special role. It cannot be less than the minimum amount determined by law, otherwise the company may be forced to liquidate. In accordance with the Civil Code of the Russian Federation, "the authorized capital determines the minimum amount of the company's property that guarantees the interests of its creditors." This stated goal in the vast majority of cases cannot be achieved within the existing rules for the formation of the balance sheet.

Since the authorized capital, in case of its increase, can be formed at the expense of the accumulated financial result (retained earnings, revaluation amounts), this does not allow the investor to judge the amount of funds contributed by investors.

The "Additional capital" account accumulates very heterogeneous data. On the one hand, this is a change in the value of assets, which is, in fact, nothing more than a part of the profit from the investment activity of an enterprise that is not taken into account by tax legislation, i.e. financial result. On the other hand, it is the share premium generated when the founders make contributions to the authorized capital of the organization. With regard to the latter, it does not seem which of the users may need historical information on the accumulated difference between the nominal and real value of shares (deposits, shares, etc.). This information has neither legal nor financial significance for the user, since it reflects the accumulated amount of investments in monetary units of different real value. Only inflationary adjustment of these values ​​will allow the user to see the real (expressed in the current value of money) share of capital contributed by the owners.

That is, in fact, the account "Additional capital" takes into account data that are not included in other accounts.

The reserve capital is created depending on the organizational and legal form, without fail and / or by decision of the owners.

The funds of the reserves are intended to cover losses or redeem bonds or shares of a joint-stock company. Reserve capital cannot be used for other purposes.

Information about the amount of reserve capital created on a mandatory basis in accordance with the Federal Law "On Joint Stock Companies" in the amount of at least 5% of its authorized capital does not carry any information significant for making economic decisions to an external user.

Due to the fact that such reserves, in accordance with the law, are mandatory, but information about them does not carry a significant economically significant burden, it makes sense to reflect such reserves off the balance sheet, and disclose the reasons for the creation and other information characterizing them in detail in an explanatory note to the accounting balance.

As stated in the Regulations on Accounting and Accounting in the Russian Federation, "in order to evenly include future expenses in production or circulation costs of the reporting period, an organization may create reserves for the upcoming payment of vacations to employees; payment of annual remuneration for length of service; payment of remuneration based on the results of work for the year; repair of fixed assets; production costs for preparatory work due to the seasonal nature of production; upcoming costs for land reclamation and implementation of other environmental measures; upcoming costs for the repair of items intended for leasing under a rental agreement; warranty repair and warranty maintenance; covering other foreseen expenses and other purposes stipulated by the legislation of the Russian Federation, regulatory legal acts of the Ministry of Finance of the Russian Federation".

As you can see, the main purpose of creating such reserves is to smooth the company's financial results by evenly distributing expenses. Accounting for such reserves distorts both the real results of economic activity and the cost characteristics of the elements of the balance sheet. Such information reflected in the report describing and characterizing the financial position of the organization rather complicates than helps the external user to understand the real state of affairs of the company and predict its financial prospects. Moreover, even such forward-looking information is reflected in a very one-sided way, since only information about expenses is reflected. There is no information in the financial statements about income compensating expenses, which can also smooth out the results of operations by distributing them evenly.

In our opinion, since such information does not contain a really useful component for an external user of financial statements, its reflection in the balance sheet is unnecessary.

Another type of reserves created in accordance with accounting rules are reserves in connection with the recognition of contingent facts of economic activity. These reserves are similar in their properties to the previous type.

Under IFRS, such provisions represent liabilities of an indefinite amount or with an indefinite maturity arising from past events that gave rise to legal or physical liabilities.

In this regard, we note that these reserves, like the previous ones, refer to possible future events (outflows of resources), the occurrence of which is probable. Accounting for future events in the balance sheet may violate the cost characteristics of the elements of financial statements as a collection of information about past events.

By itself, this information is very interesting and useful, but it has a serious drawback - it is its incompleteness. A much better solution is to separate such data into a separate information block that describes in detail the probabilistic characteristics of future events. Reserves should not be reflected in the balance sheet, but in an appendix to it, possibly in a special statement of reserves.

In our opinion, it is better to disclose information on contingent assets and liabilities in an explanatory note to the organization's financial statements indicating the degree of probability or the value of the assessment of the contingent asset or liability. Disclosure of probabilistic and estimated characteristics will simultaneously allow the reporting user to get a starting point in the formation of their own judgments regarding the prospects of the organization and not be misled, since this information for him reflects only the opinion of an accountant (economist, etc.) of the company under study.

In addition to this type of reserves, the company has the right to create estimated reserves for doubtful debts, for depreciation of investments in securities, etc., in accordance with accounting rules.

From an asset valuation point of view, such information is useful and necessary, but again insufficient. We are talking about the disclosure of probabilistic and estimated characteristics of future events.

Such provisions are also based on future events. But if, in contrast to the reserves discussed above, based on future events, all scenarios for the development of the situation are taken into account (there are two such options: maintaining the value of the asset (payment of the debt in full), reducing the value of the asset (refusal to pay the debt)), then such reserves can be considered as way to adjust the current value of assets. The cost of assets related to them is appropriate to reflect in the balance sheet at net value, i.e. taking into account the probability and outcome of adverse events.

If not all scenarios for the development of the situation are taken into account, such reserves, as well as reserves created in connection with the recognition of contingent facts of economic activity, carry incomplete one-sided information about future scenarios and cannot be directly used correctly in characterizing the current financial position of the organization. Such data (including probabilistic characteristics) must be disclosed in the explanatory note.

Not reflected in the financial statements, but very necessary for their users, is information related to the consequences of the termination of the company's activities. The principles of reflecting the value of its elements adopted in the accounting standards are based on the principles of an operating organization. But the fact is that the continuation of the company's activities is only one of the strategic investment alternatives. Another alternative may be the termination of the activity of the enterprise, which may also be enforced in the event of its bankruptcy. In the event of termination of activities (especially forced), the values ​​reflected in the balance sheet must be revalued at their liquidation value, which, as a rule, is less than the value calculated for an existing enterprise. In this case, the user of the financial statements will be very relevant information about the amount of capital calculated on the basis of salvage value. Such a value will correctly reflect the minimum size of the company's property, which guarantees the interests of a wide range of its investors and creditors. The difference between the book value of capital and the salvage value of capital can be considered as an adjustment element that meets all the properties of a provision. In this case, such a reserve may be referred to as the "Decommissioning Reserve" or the "Liquidation Reserve Fund". Such information has a high informational value and should be reflected in the financial statements.

Retained earnings is the most consistent indicator, but it is not without flaws. This account provides information on the amount of net profit not withdrawn by shareholders (depositors, etc.) and remaining at the disposal of the enterprise. But due to the fact that the authorized and reserve capital is increased (formed) at its expense, the account does not perform this information function.

The structure of capital, which takes into account in a better way than the existing one, the information needs of investors (and other external users), is presented in Table. one.

Table 1

Capital structure

Contributed capital is the sum of all shareholders' own funds invested in the company's capital. For the company, this is an external own source of financing. As can be seen from Table. 1, it consists of the authorized capital, which is a legally significant amount, and share premium, equal to the difference between the total amount of capital contributed by investors and the authorized capital.

In addition to being an external source of financing, the contributed capital is a net share capital that is exempt from the tax burden when it is withdrawn by shareholders.

Reinvested earnings are an internal source of funding. Unlike contributed capital, it is not exempt from the corresponding tax burden in the form of a tax on dividends when withdrawn by shareholders. Data on reinvested earnings show the amount of corporate capital growth. And what is important, the content of the concept of "reinvested profit" fits well into the concept of "profit" according to the Financial concept of capital, being, along with dividends, its necessary constituent element.

For analytical purposes, it makes sense to separate retained earnings and non-monetary changes in equity as part of accumulated net income.

Retained earnings (loss) is the traditional main internal source of financing of the company's activities.

Non-monetary changes in equity - the accumulated value of the increase in the value of assets as a result of their revaluation.

The increase in the value of assets as a result of their revaluation (internal profit), unlike net (monetized) profit, is usually not recognized as a financial result of the company's activities, and information about this is not reflected in the Profit and Loss Statement. Nevertheless, this type of profit can not only be recognized as such, but also be taxed accordingly. So, James R. Hitchner in his book Financial Valuation. Applications and Models states the following: "The issue of recognition of taxes on internal profits has always been controversial. Recent court cases have provided for the withholding of the amount of these taxes if the company of interest has the status of a C-corporation."

Equity capital is the company's assets that are acquired without the use of loans (credits). For investors who buy shares, and for financiers, equity is an important value. In accounting, equity is included in the basic equation of the double entry system: assets = liabilities + equity. Investors can quickly calculate a company's net worth to help make the right investment decision. This article describes simple and effective methods for calculating a company's equity.

Steps

Calculation of equity capital by the subtraction method

To use this method, you need to know the amount of total assets and total liabilities. If a private company is being considered, it is difficult to do without insider information. But open joint-stock companies (public companies) are required to disclose financial statements.

1. Find the value of total assets. It is equal to the sum of long-term assets and current assets. Assets are everything a company owns, such as cash, land, and production equipment.

   • Long-term assets are equipment, buildings and fixed assets, that is, any tangible assets (minus their depreciation) that are valid for a long time (more than a year).
   • Current assets are any accounts receivable, work in progress, inventory, and cash. In accounting, any asset that is listed on a company's balance sheet for less than 12 months is a current asset.
   • Add the values ​​of the components of long-term and current assets separately to find the total values ​​of these values. Then add the found values ​​to calculate the total assets.
   • For example, the current assets of a certain company are 535,000 rubles (135,000 rubles in cash + 60,000 rubles in short-term investments + 85,000 rubles in receivables + 225,000 rubles in inventory + 30,000 rubles in prepaid insurance), and long-term assets are equal to 75,000 rubles (60,000 rubles in the form of shares + 15,000 rubles in the form of the insured value). Add up these values: 535,000 + 75,000 = 610,000 rubles - these are total assets.

2. Find the total amount of liabilities. To do this, add up long-term liabilities and short-term liabilities. Liabilities are money that a company pays back to creditors, such as repaying bank loans and payables or paying dividends.

3. Calculate net worth. To do this, subtract the total liabilities from total assets. That is, you need to rewrite the basic accounting equation (see above): Equity = assets - liabilities.

   • In our example, from the total assets of the company (610,000 rubles), subtract the total amount of liabilities (470,000 rubles) - the equity will be 140,000 rubles.

Calculation of equity capital by the method of components

1. Find out if this method can be used. To use this method, you need to know the data reported in the equity section of the balance sheet or a similar section of the general ledger. If a public company is being considered, the necessary financial documents can be found on its website. In the case of a private company, it is difficult to do without insider information.

   • To find the information you need about a public company, search the Internet for the latest financial report. As a rule, such a report is published on the official website of the company.